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Your World With Neil Cavuto

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  FOX News    Your World With Neil Cavuto    News/Business. Money tips  
   from Wall Street. New. (CC)  

    July 12, 2011
    4:00 - 5:00pm EDT  

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status lowered to junk. >> for get the heat blanketing the nation outside the temperature is being turned up inside as well. welcome, everyone, i am here for neil cavuto and this is "your world." we are at white house, debt talks getting underway and the anger just getting started. house speaker boehner blasting the president for digging in on tax hikes as opposition digs in deeper. tea partyers launching an urgent petition to block any increase and americans are more worried about raising it than not. indiana congressman says the people have it right. congressman, you did not believe the sky will fall august 2nd if we did not raise the debt ceiling? >>guest: we have an obligation to restore the confidence of the
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american people and our ability to manage our fiscal health and to end this era of borrowing and spending that's putting a burden on our children and grandchild. we can do both. house republicans believe the path forward is to cut spending now more than a dollar for any increase in the debt ceiling and that means putting caps on the book and any increase should be contingent on sending a balanced budget amendment to the state so those are the conditions being communicated to the white house this hour, and, we are hoping the president will start to listen. >> you said yourself we are at an gas, are we not? do you see any give and take in the negotiation from either side moving forward? >>guest: well, you know, it really is frustrating. i said on the house floor today we have reached an gas -- gas as
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the president and his administration have insisted on adding tax increases to a debate over the debt ceiling and what speaker boehner said today, first and foremost, the american people know this is the president's problem more than anyone else. the president is the chief executive of our government and he has an obligation to make sure that the government pays its bills and also quite frankly we're in this mess because of the runaway spending and the failed economic policies of the obama administration. so, it is now incumbents upon the president to stop essentially talking down to the congress, dictating what his terms will be and he needs to own up to this and recognize it is his responsibility to find out what we need on capitol hill to agree to a debt ceiling increase, and that simply is to cut spending now. to cap spending in the law. and send a balanced budget amendment to the state. >> have you seen the latest
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proposals? senator mcconnell came back with a fall back plan with the president possibly raising the debt ceiling incrementally surge to approval by the congress. have you seen that plan? that could be worked? >>guest: i heard a little bit about it in the last couple of hours. as an incremental plan that, again, would require the administration from what(e) -- from what i understand, chris, to put out a list of budget cuts to offset any increase in the debt ceiling. we have to stop digging this hole. the american people necessity we have to maintain the full faith and credit of the united states of america but at $14 trillion national debt and counting the american people want us to stop piling red ink on our children and grandchild. so at minimum, it seems what senator mcconnell is talking about is authorizing a
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short-term increase but demand the white house come out with a zeal. my bottom line is we need to see leadership from the leader of this government. we need to see this president step up and put out a plan that will essentially draw the congress forward. it is his responsibility to lead this government and as he said five years ago when he was a senator, when there is a debt crisis, when we face a moment where we have to raise the debt ceiling, he said, then, of the bush administration, that it is a debt crisis but it is also a failure leadership and what we need to see now is for the president to recognize this is his problem, it is his responsibility and he needs to come to the congress and say, what do you need for us to figure out how we can do this together in the best interests of the american people. >> i feel like i could ask democrats or republicans because both are dug in do you feel like you are putting your political
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legacy and your political future on the fact that come august 2nd or august 4th or 11th whatever the day is we will not run interest a daft or a problem where interest rates are moving rapidly higher and the full faith and confidence in the u.s. government is tested, do you believe you are putting your political legacy on the line? >>guest: to me, and this is true of most house republicans it is not a matter of licks or putting our political legacy on the line, we're putting the well-being of future generations of americans online. if we don't change this path toward fiscal insolvency we will go 10 years done the road kicking the can and face the same problems that greece is facing and port began and ireland facing. we need to take a step back now^, seize this moment, to introduce real fiscal discipline. cap spending into law, and time for a ban been -- balanced
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budget amendment be ratified. >> the president earlier today, and it is not the first time, said we will get to the point where maybe august 2nd social security checks will not be mailed out trying to tug at the american people to say you will pay for it right away if we did not do something by august 2nd. >>guest: in, i think the american people are better in followed about washington, dc than any time in my or your lifetime so, a lot of these old tactics. look we have a couple of trillion coming in yet into the federal government and the president would have the ability to provide for the common defense, provide for our entitlements and pay the national debt with the $2.2 we have coming in. this is the same old tired game in washington, dc. i think the american people see right through it. the people i'm talking to as i travel across the state of indiana virtually on a daily
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basis they say, chris, we are alarmed about the debt which is a result of the borrowing, the spending, and the bailouts of this administration and the last congress, and a result of the failed economic policies of this administration. that's why we're saying, the president owns this problem. he needs to stop trying to dictate terms like higher taxes and he needs to come to the congress and say, what did you need on behalf of the american people for us to honor the full faith and credit of the united states but restore confidence in our commitment of first school responsibility and reform and that, again, more than a dollar in cuts for any dollar increase in the debt ceiling, statutory caps, and the time has come to make any increase in the debt ceiling contingent on sending a been ban to the state? >> got to leave it there, congressman, appreciate your time. democrats are irritated, wall
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street is not getting more involved. and putting more pressure on republicans to sign on to tax hikes. and they believe wall street would rather have in deal than that deal. he urged that failure to raise the debt limit would send markets into disarray. you not buying that? >>guest: no this is a scare tactic by the administration to get people behind his policy to raise the debt ceiling. but wall street does not fair it and polls show 60 percent of the public does not favor it because they do not believe in the tax and spend ways of the politicians. mostly the democrats, why will you believe them if over four years you see the track record and there lab a complete failure in this administration's ability to get this economy moving. in terms of the unemployment they came had and stated unemployment would be capped at 8.7 percent, but it is now at 9.2 percent. they promised five million green
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jobs. where are they? in the private sector you would be fired. now they look to wall street for support and wall street is a wiping boy for the obama administration. >> obviously tax hikes would be frowned upon by wall street but is wall street getting ahead of the august 2nd date. the market took a dip over six weeks, but, last week, nice, and gains over 600 points and it seemed the market is moving higher, are they pricing that they will not default? >>guest: the pull back is gear dodd what is happens overseas. >> the markets thinks we will be okay? >> yes, earnings have been strong and to we had an administration that what proactive helping businesses get back to hiring and being supportive and, rather than putting more tax decreases than increases you would have a hire
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market. >> what happens if we get to august 2nd and no deal in place for the debt. will interest rates go up? will it take a while? will the treasury say we will not pay this or that, but we will service our debt. how much of an impact will it have or could it have? >>guest: they will is to cut a deal. interest rates are beginning to stay stagnant for a while and they will not jolt the markets, people did not want to get interest a position where suddenly americans feel uncomfortable. so, ultimately people are beginning to see things work out but why think they should use the scare tactics. it has been a failed policy from the beginning. >> a big reason why ron paul wants to focus on his presidential bid announcing today he will not seek another term in the house of representatives. and now in the first television interview since that surprise announcement the g.o.p. candidate will be on sbn tonight at 6:00. you don't get it?
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demand it! she called it a death panel and now some democrats agree, the list of lawmakers against the cost control board is growing. could it spell death for the health care law? he reports and you be the judge. stay tuned. woman: saving for our child's college fund was getting expensive.
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>> opposition growing not from republicans but from democrats over a controversial health care advisory board. at least eight democrats now want the independent board gone. it is a board the republicans call "a death panel." but the judge says it is unconstitutional no matter what you call it. health and human services secretary down played the role twice this week, two separate hearings.
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but, others are not so sure it should be down applied or that it will just be a group that will have an impact. >>judge napolitano: when sarah palin referred to it as a death penalty she was mocked and hooted and it may very well that and as you said in your introduction there are democrats who fear it might be. what we did know, chris, is a panel appointed by the president, not subject to senate confirmation so there is no f.b.i. background check and the 15 members can engage in rationing, they can say there is only so much money for the state of new jersey. there is only so much money for kidney trance police departments. there is only so much money for grandma who copes -- keeps break the same help over and over. the power of the group is draconian. chris chris she says it is a stopgap measure if congress cannot bring the costs down
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rapidly enough this group will stick in and aid bringing down the costs. >>judge napolitano: he is the serious constitutional problem. congress cannot decide what the tax rates should be, what the debt ceiling should be what the budget should be. >>chris: or how fast the costs go down? >>judge napolitano: is unelected bureaucrats have the power. the last time we looked at constitution we agreed only the congress can decide on the law not a panel appointed by the secretary of health and human services that is the constitutional issue putting aside how much can grandma have for her artificial hip, the serious constitutional issue is an entity in a government other than congress deciding how to spend the money. >>chris: the president loved this saying he does not, he thought it should be bigger and agree in responsibility and a cornerstone of my health care bill so it is not going away.
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>>judge napolitano: and this is a president who think he can start a war without congressional authorization. >>chris: it is not going away because he wants it. >>judge napolitano: it is dangerous if the president wants it and willing they put it interest place. that is the significance of what you said. every republican in the house and at least eight democrats want to eradicate this. we did not know the number in the senate. they have in the counted heads. democrats are starting to whistle the same tune they ripped into governor palin for whistling a year and a half ago. >>chris: it is the president's biggest piece of legislation, and if there are democrats going against the president on that piece of legislation, then it must be serious. >>judge napolitano: democrats fear they will take money from grandma's hip and that fear is legitimate. >>chris: you can catch the judge at 8:00 eastern on weeknights on fox business. >>judge napolitano: i have charlie rangal on with me
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tonight. >>chris: second own to stewart barney. scorching hot wave spreading across the nation and into food stores. we will explain.
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>> massive heat wave gripping half of the country. heat advisories issued in 25 states. i'm not kidding. the severe drought spreads and to new york it is cool today on how bad it is going do get. any relief ahead? >> you are not out here. neil cavuto would never put me out here in 90 degree heat.
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it is 92 in new york which is balmy compared to the southern and central plains with the heat index in new york it feels like 94 and my makeup is about to melt. but look at the heat advisory, close to a dozen states under advisories and in the maroon the heat and humidity combined it feels between 100 to 115 degrees, dangerous heat. so people are advised it stay indoors near the air conditioners and if you know neighbors that are elderly or small children, they need to be indoors where it is cool. and now a look at the temperatures or what it feels like with the humidity, with the heat index, 108 in nashville and 108 in memphis spreading across the heartland. and now, the drought in some cases we have seen exception adroit and that is not helping because it is just baking the ground. we did not have any miles an
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hour to help the situation. so you can see a lot of states still in exceptional drought is, unfortunately, there is going to continue for a lot of places into the weekend, here in the northeast, the relief comes tonight and we the knock it back ten degrees and me and my makeup are thankful for that. >>chris: i will soon be walking home if my wool suit, all right? is will get your revenge. >> i need a picture. >>chris: thank you, janet with the weather if new york. it is in the that good if you are energying the hot weather because it is hot. and drought she was talking about is gripping 14 states. farmers expected to loss $3 billion. and it could cost you at the grocery store, as well. we have been talking about this for a long time. corn, through the moon. wheat, through the moon. and i noticed today sugar as expensive as it has been since march or april, this will translate into yet higher prices
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for people at the checkout line? >>guest: absolutely. and it is 102 here. >>chris: but it's a dry heat. >>guest: it is a dry heat. it is. all of the commodities will go through the roof and now bacon, can you believe it, it is skyrocketing. cannot believe it. >>chris: the in humanity. >>guest: we have been lucky with corn because the growing season has been going well and record amounts of harvesting this year but, that said, when you eat into your own household discretionary income with air conditioning, that will eat into prices at the grocery store, at the gas pump, over and over and over. >>chris: you saw corn up 81 percent the lat 12 -- last 12 months and if you go back, say, five years they are whip sawed.
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last year sugar fell off a cliff. do you anticipate that helping, as well, as it goes up it must come down? >>guest: last year, rice, there was rice in the streets, there was no more rice, we had a shortage. it seems we are in this stagflation economy and everything is going up. a lot of inflation out there. wheat, corn, that affects beef prices and chicken prices. everything is connected. people did not pay attention to agriculture and stocks but they are all related. >>chris: and a final thing, we are talking about the weather, weather has a big impact on retailers, they always use it as an excuse, how is the weather first six months of this year affected retailers as they are ready for back-to-school? >>guest: it is funny, we had
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some positive news last month on that. it is not that people did notship but you have to follow where they are spending the money and following that money. so, obviously, when it does get hotter, you need more "stuff," and you want on go to the mall to get the "stuff," and you want to get out of the house and go someplace cool so win they have you, that is the trick of retail, main taking what we call "conversion." we get you there and while you are there we want to convert that into dollars in our pockets. >>chris: thank you, stay cool. the hit heard an the world, jeter swinging his way into the history boxes. why his hit means this die hard yankee fan will have to fend off yankee fan will have to fend off the tax man?
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percent to 15 percent a year the last five years, and this year they are looking at single digits so the c.e.o. of cisco said, look, we need to find $1 billion in cost savings and well find it by cutting employment is you have the 10,000 job cuts. >>chris: this is not new on job cuts urgely it is good for stocks and bad for people but we are talking earning seasons coming up and the companies will start reporting and they will report better lives because they are so efficient they having left so many people go. will that trend reverse? >>guest: good question over den years we have 131 americans working now the same rate as 10 years ago, almost a lost decade so, now, going forward you wonder where the jobs will occur, and you were right, technology generally does lead the way as far as new employment, but, again, a lot of the companies, especially the
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ones that come from the s&p 500, they need to beat the bottom number so cisco is probably one of the first companies and we will hear many more of companies looking to have massive layoffs like this, only because they need to hit that bottom line number, that so many on wall street are expecting them to. >>chris: and we have 10,000 laid off cisco and then again last friday week, so what kind of impact will that? >>guest: it will be if for the stock market, something that we will need as far as maybe a steroid shot into the u.s. economy, but, when you look at, if you go back to 1948, and you look at the rolling twelve
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months gross domestic project, any time we dip below 2 percent, the u.s. committee always falls into a recession, two or three quarters later and now it is at 2.3 percent so if you are of the mindset the third quarter will be slow, that puts us interest a row session, probably the first quarter of twelve 12, which is not good for the president or for the u.s. economy, and not good for the global economy so we are in a dire predicament. >>chris: will economy has had so many steroid shocks it is looking like mcguire and time to look more long term but i guess the fed will do what they have to do to keep that unemployment rate done. thank you, sir. and president obama now out with a new plan designed to cut the red tape. called strong community and the
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white house says that it will speed up investment to six struggling communities. and my next guest says the only thing efficient about the program is the ability to waste taxpayers' money. and now, from the cato institute, i am sure the white house is arguing much of the money is being waste asked they are saying this will be used in a more efficient manner. >>guest: here is what the problem does, it embeds or takes federal bureaucrats and embeds them in cities and assigns the bureaucrats to figure out ways to get more money from the federal government. now, let's use an analogy to understand what this mean. imagine i am a crook dealer and i say i will give you a few free hits of crack is you then will become dependent on me and lone my pockets as you buy more and more crack the cities do not need to become dependent on the federal government. they need to figure out how to
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fix up and clone up -- clean up the mess they have and the federal government rather than figuring owe ways to waste money we should cut back on exactly that kind of spending as we are in the middle of this crisis of too much spending. >>chris: the money that they are going to help the communities invest, or use, is already promised to them, essentially, so if i'm a taxpayer i am saying, if i am wasting that money because it is in the used wisely, even if why think it should go this it is already going there so i with say, well use it best you can, incent that what will this do? >>guest: it is a zero sum game. say the federal government has a program for cities, and that program has $1 billion appropriated for it, well, maybe the embedded federal bureaucrats in the sex select cities will do a better job of getting a slice of the $1 billion but we will in the help the overall economy and all we are doing is getting the
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cities hooked on federal dollars and we know we cannot afford that anymore so in the long run that will make the cities even more vulnerable because sooner or later as we march toward our greek style fiscal crisis we know that kind of wasteful spending cannot continue. >>chris: what i don't understand how they hope to cut through red tape with bureaucrats going into the city and adding more red tape? you do not cut red tape with red tape and that is what it seems like this plan is doing. thank you, sir. >>guest: typical of government. >>chris: laterren on -- layer on layer. more and more adults are mooching off of mom and dad. dave ramsey is worried and he is next.
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for a body in motion. >>chris: and freshman house and senate republicans legal -- loyal to the tea party are asking for a meeting with the president. they are asking for a vote on their own cut cap and balance ban in the house. >> and today a staggering 70 percent of parents think they have to support their adult kids to the age of 39. to news has dave ramsey concerned. he joins me now from his radio show. dave, wasn't it a generation ago or less that older generations were being cared for by their kids? >>guest: which is how it is supposed to be. unbelievable! what kind of, is this the
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babying of america? and now 50-year-old people are thinking they are 85-year-old mother will take care of them? when do you become a man? >>chris: how do we get do this point? it was okay, if you are home from college, 24 or 25 or 26, and before you get your first job, before you land on your feet but now it is 36, 37, and more? >>guest: it is like a whole generation of codependents and enable others. it is ridiculous. we deal with it in financial counseling the number people that go into debt to take care of a frye-year-old skid who will not work and balance their own budget like they are in congress is out of criminal. and there is a family dysfunction here that is sickening. the usa article saying 70 percent of the people believe they will have to do it, that number seems high to me, but, 50 percent is a disease we have to
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break. >>chris: and a third go into debt to do it. that probably bothers you more than anything, if they dent have cash on hand and they have to go into debt. we talk all the time about people not being prepared for retirement or putting anything aside, if you have to go into debt as you are going into retirement, that cannot be a good sign. >>guest: no, it can't and the anyone side, we also have some of the kids that are trapped in the middle that are 45, and they are taking care of their 24-year-old and their 65-year-old mother, the sandwich generation so they are caught, the ones that are responsible. we have this idea where we have gotten family from a toxic viewpoint out-of-control and we have last the dignity of teaching people to stand on their own and having ride in self reliance. >>chris: how did we get here? is it the recession? the fact we have eight million jobs lost? is it more education? more a shift in the way we view
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the family or view going out on our own? >>guest: it is the shift. the number people that get married before 25 years old is way off of what it was, say, two decades ago. and, so this idea that you emotionally and relationally mature into a self reliant person has shifted away and that has gone with things, well, we have a sense of entitlement about everything. we are entitled to a cell phone or a lux credit car or to a vacation in europe. i grew up in a generation and i am not that hold, i am only 50 you did not see the beach if you lived in the interior of the united states until you were in high school. and new, it is like you have to go there when you are six or you have committed child abuse. so this sense of, we have become a budge of spoiled brats and we have do change that. >>chris: my folks watching and i will tell them when i call it
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is to say i love you not to hit you up. good to see you, dave. >>guest: send out the message over the airways. >>chris: fair warning. dave ramsey good to see you. to california, all eyes on a house special election, polls closing in six hours, and it is a heavy democratic area but the republican candidate is closing in. and now to los angeles, what is the story? >>reporter: it has energized the republican party in the minority, at the state and federal law. the district is the 36th, 15 miles from downtown los angeles. and it is a district where people believe is misshaken because of gerrymandering. and it curls around redondo, and the opening was created when
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jane hardmon retired. and a second generation and her brother is a former mayor but vote turnout will be low, a nasty campaign, so, all about absentees and she said it is important to get out the vote. take a listen. >> people know how to vote in november, in juan, or march, but people never vet on july 12th is we think it will be a low voter town out and that will bill -- boil down to who gets the voters to the polls. very report the republican nominee is a local businessman, who has been born and raised in the area and he seas he -- he says he has a chance and believes he can win. california has a new primary system and everybody can throw into the hat and the top two come out so they expected two democrats come out because it is
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18 percent in favor of democrats. he beat out the secretary of state and became the number did nominee and he says he cannot only win but he has a darn good chance. >> the political pros would say i cannot overcome 18 percent but they are wrong because we are. we are doing it because the democrats and independents are getting the message that we are sticking on the issues, not the negative advertising. talking about the economy. they get it. >> he has been talking about the economy, the economy, economy, and that is all he talks about. it is an indication of what could come around in 2012 and whether a war on washington could get some in office but it has been nasa difficult and dirty and people believe with charges of racism and extremism could be what is to come next year and it could be very close. we will keep you updated and polls did not close for a long time and it could be late hours
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in the morning before we know who wins. >>chris: thank you from los angeles, adam. and the republican in that hotly contested congressional race in california will be on the show. he gave up a big part of baseball history and because of that, this yankee fan could be getting a big tax bill. someone here saying forget those dam yankees, more like the damn i.r.s.
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.
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>>chris: the gift that keeps on taking. i didn't write that, i can't take credit.
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christian lopez giving up the 3,000th hit and a big payday and the yankees giving him luxury seats for the season and memorabelia valued at $32,000. but reports say the i.r.s. could hit him with a tax bill for the tickets, up to $13,000. my guest says the i.r.s. has better things it do. and a partner at accounting firm, robert, this really is not the i.r.s.' fault, though, the fault they are following the letter of the law? >>guest: exactly, sometimes you can have a hard time understanding the i.r.s. rule, when he caught that ball and does not immediately throw it back to the field he had tax issues. certainly as soon as he exchanged that ball with the yankee organization in return for goods and services, he certainly had a tax issue. >>chris: he will be taxed as if this is income, however much
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they value this package tickets that is not income. >>guest: it will be taxed as income and the reason is because under the i.r.s. rules, everything that you receive is income unless the i.r.s. says it is not. if you get a gift from somebody that's disinterested or detached generosity, they are not giving it to you in exchange for anything that is in the income but when you receive anything else under the theory that increased your net worth is income. >>chris: does the i.r.s. have leeway looking at case by case and saying this is an individual who is pay off student loans, and he does not make a lot of money, and he does a good deed and how he owes $13,000. >>guest: they have tremendous leeway. prior to mcguire hitting his 70th the i.r.s. said whoever catches that bill when they catch it they have income
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whether they give it away for services or not and the i.r.s. back pedaled and there was such an outrage from baseball fans. >>chris: this is not a common situation, a 3,000 hit baseball but how common for the giver to pay the taxes in this case? >>guest: very common. oprah gave away cars to the members of her audience they were surprised they had to write a check for possibly $7,000 or $8,000 depending on the tax bracket. >>chris: great information, if to see you. and robert is a yankee fan, full disclosure. stop whining and hiring. why something this guy just said has a small business owner fuming. verizon claims i 4g lte is twi as fast as &t.
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. small business owners lashing out today after g.e. ceo says this. >> similar to people that are part of the business sector, the people in room and all of
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our colleague, we have to stop complaining about government. to get some action underway there is just no excuse today for lack of leadership. so let's get with it. >> my next guest says immelt is the guy that isn't with it. william marsh with me. running g.e. is different from running american bar products especially when you get billions in government contracts, it's easier not to complain about the government, isn't it? >> chris, great to be here. it'll absurd when jeffrey immelt receives tremendous subsy dids from the government and he has -- subsidiaries from the government and has tax bills of zero. american bar products that employs ten to 15 guys makes a tiny, tiny fraction of that amount. our tax bill between 30 to 40% of what we earn. so the general contempt and the lack of familiarity with what is happening, small
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business level with the president and with jeffrey immelt is absolutely stunning. >> your biggest concern right now, i know you said you can't hire anybody right now is that just because you don't know what is coming down the pike in the next two years, three years? is it taxation, policy, healthcare? what is preventing you from really being able to grow your business? >> you will find it interesting. we operate our business on an incentive plan. my guys are a substantial part of their income on a bonus. the bonus is shared amongst all workers, myself included. for anybody that is hired. i put it before my guys and say do we need an extra man because it's one more mouth to feed. the unanimous decision in this environment from my guys is no, we don't want to hire anybody. we'd rather work the extra hours, be more conservative, be more confident in our jobs. they said don't hire a guy so i'll follow their lead and not hire a guy because there is a lot of uncertainty out there. don't get me wrong, small
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businessmen pros sper in uncertain environment. if you start a business it's uncertain world. you don't know if you will have customers or products, you don't know if they will pay you. we can deal with uncertainty, but we can't deal with perpetual, run away government deficit. we know the party is coming to an end. we know if the government doesn't have discipline to say no to raising the debt, the small business guy like myself is on the hook. jeffrey immelt has his friends in washington and will find loopholes but small businessmen like myself don't have representation. we're sitting on our hands today. >> william marsh from american bar product. thank you. we appreciate you joining us. best of luck throughout the rest of the year with your business. >> thank you. >> that will do it for us here in one hour on the fox business network, congressman ron paul is running for president but he is not seeking re-election. fox business has the first tv interview since making the surprise announcement later today. if you don't get fbn. >> demand it.

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